Corporate responsibility is the word on everyone’s lips, both in Germany and across the EU. For months now, there have been political discussions about how best to protect human rights in global supply chains. At the center of these discussions is what is being referred to as the Due Diligence Law—otherwise known as the Supply Chain Law. The purpose of the law is to introduce obligations for multinational companies to respect human and worker’ rights, not only in Germany and other EU member states but across the entirety of their global supply chains. Past experience has clearly shown that voluntary initiatives alone have only a very limited impact when it comes to improving working conditions. Industry dialogues of this type or multi-stakeholder initiatives, where representatives of industry, civil society, and politics advise on improvements in corporate practice, are no substitute for legislation. At best, they can serve as a complement to binding regulations. This makes it all the more important for such initiatives to fulfill certain criteria so that they can make a genuine contribution to human rights and environmental standards.
A good example of a legally binding initiative is the Accord on Fire and Building Safety in Bangladesh (The Accord). The Accord is an industry initiative that was launched in the immediate aftermath of the collapse of the Rana Plaza factory building in 2013 in Bangladesh, and since then has improved the lives of millions of workers in the country.
The Rana Plaza disaster killed 1,134 people and injured at least twice as many. The five factories that were part of Rana Plaza mainly supplied European and American clothing brands. Just a few months before the collapse, the textile factories had been subject to several inspections, during which auditors failed to identify any faults or concerns.
Rana Plaza highlighted the failure of voluntary corporate responsibility initiatives and caused a global uproar over exploitation, working conditions, and accountability. As a result, The Accord was initiated. To this day, The Accord remains one of the most successful international agreements. Other standards and initiatives can, and indeed must learn from it.
The success of The Accord comes above all down to the fact that it is a legally binding agreement between participating companies and trade unions. There are sanctions for non-compliance with the provisions; there is a straightforward complaints mechanism for workers and a high level of transparency on the side of the companies.
Drawing on the experience of The Accord, various key criteria for successful industry standards can be determined: measurable commitments, equal representation of employees and unions, complaints mechanisms for the workers affected, as well as conflict resolution mechanisms for member organizations, to name just a few examples.
Looking at Bangladesh, it is clear that Germany and the EU as a whole have much to learn from the country’s experience. Two key lessons are: the importance of well-designed industry standards, on the one hand, and the need to, at long last, pass an effective law, on the other.
This article was originally published in German at www.fes.de.
Dr Miriam Saage-Maaß heads the Business and Human Rights Program at the European Center for Constitutional and Human Rights (ECCHR).
Franziska Korn is a Policy Advisor for Business and Human Rights in the Department of Global Politics and Society of the Friedrich-Ebert-Stiftung (FES). Previously she headed the FES office in Bangladesh.
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